Empire rethinks options at Gingin
Empire Oil & Gas is considering its options after an attempt to restart its flagship gas-condensate plant in the Perth Basin failed.
The Red Gully-1 well near Gingin has been out of action this month after it became partly blocked in the aftermath of a pressure survey.
Empire yesterday said a nitrogen gas lift intended to restart the flow was unsuccessful.
“The company is now assessing various alternate options intended to restart the well,” chief financial officer Rachel Rees told the Australian Securities Exchange.
Empire requested a suspension of its shares, saying it expected to provide an update by September 13. The shares had been in a trading halt since Monday.
Ms Rees said the potential impact on the company of the shut-in of the well would also be assessed.
Empire’s shares last traded on Friday at 12¢.
The oil and gas junior said on August 18 that when the well was reopened after the pressure survey, liquid was held up in the production tubing, preventing flow at the usual rate.
Condensate, gas and water were produced from the well over 10 days, but at insufficient rates.
New chief executive Angus Walker said at the time that bringing the well back online quickly and economically was a priority for Empire.
Before the restart problem emerged, Empire said on August 16 it was likely to impair the carrying value of Red Gully because the survey had shown a reduction in ultimate recovery of gas and condensate.
Iron ore miner-contractor Mineral Resources is Empire’s biggest shareholder with a 19.4 per cent stake, which it bought from ERM Power a year ago for about $9 million at 45¢ a share.
The Empire Oil & Gas Red Gully-1 well near Gingin remains out of action.